iPhone maker Apple (AAPL) is in the midst of several controversies lately, with the Diversity, Equity, and Inclusion (DEI) policy changes and the £1.5 billion class action lawsuit starting in the UK. The tech giant is accused of overcharging its consumers for software downloaded from its App Store marketplace. Meanwhile, Apple’s board of directors has urged shareholders to vote against the rollback of DEI policies. AAPL stock closed down 2.4% on Friday, January 10, and ended the week in the red, down 2.6%.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Apple’s Board Refuses Call to Rollback DEI
Apple’s board has asked its shareholders to vote against a proposal that ends its DEI programs. The board believes that Apple’s DEI policies are well-balanced and have the required checks in place. The issue comes as one of the conservative groups has called for the removal of DEI policies since they expose the company to litigation and reputational risks.
Several tech firms have rolled back their DEI policies, given that the incoming President Donald Trump is a big critic of such policies. Apple’s shareholders are set to vote on the proposal on February 25. Rival Meta Platforms (META) is the latest to join the growing list of companies that are scaling back and ending their workplace diversity programs.
Here Are More Details on the £1.5B Antitrust Lawsuit
The first trial in the class action antitrust lawsuit against Apple is set to begin today, unless the company opts for an out-of-court settlement. Consumers have alleged that Apple charges “excessive and unfair” commissions on its App Store downloads, sometimes as high as 30%. Apple is accused of leveraging and misusing its dominant position in the app store market. If Apple loses this lawsuit, it will end up paying claims worth £1.5 billion to millions of UK consumers, digging a deep hole in its pockets.
Apple is accused of earning record profits from these commissions, which could have been limited if the company allowed developers to feature their content on third-party marketplaces. One of Apple’s biggest competitors in the space is Alphabet’s (GOOGL) Google Play Store and Android operating system. However, Apple seems to have created a virtual dominance within its own iPhone and iPad ecosystem.
The trial, set to be heard in UK’s Competition Appeal Tribunal, is expected to last for seven weeks, with Apple’s new CFO Kevan Parekh set to testify. Big Techs worldwide remain under immense pressure as they face scrutiny from regulators for their monopolistic positions. Apple is set to fight back the case, arguing that it follows fair practices and offers discounts to most developers. The company will also justify its commissions from the significant investments it makes in the platform and offerings.
Is Apple a Good Stock to Buy Now?
Analysts are divided on Apple stock’s trajectory due to the diminishing iPhone sales in China. On TipRanks, AAPL stock has a Moderate Buy consensus rating based on 19 Buys, seven Holds, and three Sell ratings. Also, the average Apple stock price target of $244.77 implies 3.3% upside potential from current levels. In the past year, AAPL shares have gained 29.6%.
